OPTION AGREEMENT
THIS OPTION AGREEMENT ("Agreement"), dated September 30, 1997, is
entered into between PRINCETON HOSPITAL, INC., a Florida not-for-profit
corporation, ("Seller"), and NEWCARE HOSPITAL CORPORATION OR ITS ASSIGNS, a
Georgia corporation ("Purchaser"); collectively called the Parties.
RECITALS
A. Seller owns certain land, improvements, tangible personal
property, furniture, fixtures, equipment, cash and cash accounts, accounts
receivable, inventory, supplies, licenses and all other tangible and
intangible property situated in Orange County, Florida, and utilized in the
operation of Princeton Hospital, a 150 licensed bed acute care hospital whose
address is 0000 Xxxxx Xxxxx, Xxxxxxx, Xxxxxxx, 00000 and its accompanying
facilities (collectively called the "Hospital Property").
B. Seller desires to grant to Purchaser and Purchaser is desirous of
purchasing and obtaining from Seller an exclusive option to purchase such
Hospital Property from Seller under the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, the Parties hereby agree as
follows:
ARTICLE 1: OPTION TO PURCHASE
1.1 Grant Of Option. Subject to the terms and conditions of this
Agreement, Seller hereby grants to Purchaser the exclusive, irrevocable option
(the "Option") to purchase from Seller all of the Hospital Property whether
now existing or hereafter acquired, free and clear of all liens, encumbrances
or liabilities.
1.2 Consideration, Expiration and Exercise of Option.
(a) In consideration of the grant of the Option to Purchaser
from Seller, the Purchaser shall pay to the Seller TWENTY-FIVE THOUSAND AND
NO/100 DOLLARS ($25,000.00). Payment made by Purchaser for the option shall
be non-refundable to the Purchaser.
(b) Unless sooner exercised, the Option shall expire on
September 30, 2002 (the "Expiration Date").
(c) Purchaser may exercise the Option by giving written notice
to Seller on or before the Expiration Date of Purchaser's intent to purchase
the Hospital Property (the "Notice of Exercise").
(d) If Purchaser fails to give notice to Seller as provided in
this Section 1.2, then Purchaser shall be deemed to have irrevocably waived
all of its rights under this Agreement, and the option shall automatically
expire without need for further documentation.
1.3 Purchase Price. If the Option is exercised, then the purchase
price ("Purchase Price") for the Hospital Property shall be an amount equal to
the aggregate indebtedness of the Seller at such time as the Option is
exercised (including tax-exempt and taxable bonds, capital leases, accounts
payable, that certain capital improvement/working capital loan described in
the Management Agreement of even date herewith or other debt), which shall be
payable by Purchaser at the Closing (hereafter defined) by extinguishment or
assumption of all such indebtedness then outstanding, provided that assumption
of Seller's tax-exempt and/or taxable bonds shall only be accomplished upon
the express written consent of the bondholders of said bonds.
1.4 Adjustments and Costs.
(a) All accounts for water, sewer, gas, electrical, telephone
and other public utilities payable by Seller shall be transferred to
Purchaser's name effective as of the Closing Date.
(b) Seller and Purchaser shall each pay their own costs and
expenses (such as attorneys' and consultants' costs and expenses) incurred by
such party in connection with the transactions contemplated by this Agreement
not adjusted or allocated as set forth in this Section 1.4 or otherwise
provided for in this Agreement.
1.5 Independent Contract Consideration. Purchaser has delivered to
Seller TWENTY-FIVE THOUSAND AND NO/100 DOLLARS ($25,000.00) cash (the
"Independent Contract Consideration"), which amount has been bargained for and
agreed to as consideration for Purchaser's exclusive option to purchase the
Hospital Property and for Seller's execution and delivery of this Agreement.
The Independent Contract Consideration is in addition to and independent of
all other consideration provided in this Agreement and is nonrefundable in all
events.
1.6 Management Agreement. The execution of this Option Agreement is
expressly conditioned upon the execution of that certain Management Agreement
of even date herewith by and between the parties hereto.
ARTICLE 2: CLOSING
2.1 Closing. The closing of the transaction contemplated by this
Agreement shall occur at the offices of the Seller in Orlando, Florida, or
such other place, as agreed to by the Parties, at 10:00 a.m. on the first
business day which is not less than 60 days after the date on which Purchaser
delivers the Notice of Exercise to Seller, or on such other date as may be
agreed by the Parties (the "Closing Date").
2.2 Closing Obligations of the Parties. The Parties shall execute and
deliver the following documents (the "Closing Documents") and otherwise cause
the following events to occur at the Closing, each being a condition precedent
to the others but all being deemed to have occurred simultaneously (and all
Closing Documents shall be in form and substance reasonably acceptable to
Seller and Purchaser):
(a) Seller shall execute, have acknowledged where appropriate,
and deliver to Purchaser the following items with respect to the Hospital
Property:
(i) a special warranty deed (the "Deed"), conveying to
Purchaser title to the Hospital Property, subject only to the Permitted
Exceptions.
(ii) a xxxx of sale and assignment (the "Xxxx of Sale")
conveying to Purchaser all of Seller's interests in the Hospital Property;
(iii) all the original leases and unrecorded agreements
affecting the Hospital Property;
(iv) an affidavit of Seller stating that Seller is not a
foreign person in compliance with the requirements of Section 1445(b)(20) of
the Internal Revenue Code; and
(v) such affidavits and other documents as may be required
or reasonably requested by Purchaser or its attorneys to effect the
consummation of the transactions contemplated hereby.
(b) Purchaser shall execute, have acknowledged where
appropriate, and deliver to Seller the following items:
(i) instruments necessary to provide the Purchase Price;
and
(ii) such affidavits and other documents as may be required
or reasonably requested by Seller, its attorneys to effect the consummation of
the transactions contemplated hereby.
(c) Purchaser and Seller shall each execute settlement
statements showing payment of the costs of Closing. Prorated items and costs
shall be charged or credited to Seller and Purchaser as provided in Section
1.4.
(d) Seller shall surrender possession of the Hospital Property
to Purchaser.
(e) Seller shall, at its sole cost and expense, cause a title
company acceptable to both Parties to issue and deliver to Purchaser an
Owner's Policy of Title Insurance Form T-1 (the "Title Policy") in the full
amount of the Purchase Price, dated as of the Closing Date, insuring
Purchaser's fee simple title to the Hospital Property to be good and
indefeasible subject only to the Permitted Exceptions and the standard printed
exceptions, except as otherwise to be deleted as described herein, contained
in the usual form of the Title Policy except that:
(i) the exception as to area and boundaries shall be
deleted except for "any shortages in area" and such deletion shall be an
expense of Purchaser;
(ii) the exception as to restrictive covenants shall be
endorsed to show those restrictive covenants currently filed of record, or if
there are none, shall be deleted;
(iii) the exception as to taxes shall be limited to standby
fees and taxes for the current year and subsequent years, and subsequent
assessments for prior years due to changes in land usage or ownership endorsed
"Not yet due and payable"; and
(iv) the exception as to mechanics liens shall be deleted.
ARTICLE 3: TITLE
3.1 Owner's Title Evidence. Within 20 days after the date of the
Notice of Exercise, Seller shall deliver to Purchaser at Seller's expense the
following items relating to the Hospital Property:
(a) A preliminary title insurance commitment (the "Commitment")
showing the status of record title to the Hospital Property, together with
legible copies of all documents evidencing exceptions to title shown therein
or otherwise affecting the Hospital Property. Such preliminary title
insurance commitment shall commit the title company to insure title in the
Hospital Property in Purchaser in the amount of the Purchase Price. The
Commitment shall affirmatively provide for the deletion, at Seller's sole
expense, of all standard printed exceptions of Schedule B-2 thereof. On or
before Closing, Seller shall cause the Commitment to be endorsed so as to
change the effective date to a date not earlier than 3 days prior to closing;
(b) Two copies of a current ALTA survey (the "Survey") of the
Hospital Property, prepared by a registered Florida professional surveyor
("Surveyor") acceptable to the Parties. The Survey shall certify to Purchaser
that: (i) the Survey was made and staked on the ground by the Surveyor; (ii)
the Survey shows the location and dimensions of all improvements, highways,
streets, roads, railroads, rivers, creeks, or other waterways, fences, any
easements, and rights-of-way visible on the ground or reflected in the
Commitment, on or adjacent to the Hospital Property, if any; (iii) there are
no visible discrepancies, conflicts, or encroachments except as shown on the
Survey; (iv) the Hospital Property does or does not lie in the 100-year flood
plain as established by the U.S. Army Corp of Engineers or any other
governmental body; (v) the Survey is a true, correct, and accurate
representation of the Hospital Property; and (vi) the Survey sets forth the
number of total acres/square feet (whichever is applicable) comprising the
Hospital Property, together with a metes and bounds description thereof. All
easements and right-of-way shall be referenced to the recording information
applicable to the documents creating such easements or rights-of-way which
have been recorded with the County Clerk of Orange County, Florida. The
Survey shall locate and xxxx all corners and angles of the Hospital Property's
perimeter on the ground with permanent, buried iron surveyor's stakes. The
Survey shall: (i) meet the requirement of a Category IA Survey, as promulgated
by the F Society of Professional Surveyors; and (ii) be sufficient to cause
the title company to delete (except for "shortages in area") the printed
exception for "discrepancies, conflicts or shortages in area or boundary
lines, or encroachments, or any overlapping of improvements" in the Title
Policy; and (iii) shall be acceptable to the title company for the purpose of
deleting the survey exception from the Title Policy.
(c) A certificate or certificates of taxes due covering the
Hospital Property prepared by the Treasurer of Orange County, Florida
3.2 Title Defects. If Purchaser objects to any matter contained in
the Commitment, or on the Survey or if Purchaser asserts the existence of any
encumbrance, encroachment or defect in or objection to title which renders
title to any portion of the Hospital Property unmarketable (any of which is
called a "Defect of Title"), Purchaser shall give written notice to Seller of
all Defects of Title within 15 days after the delivery of the Commitment and
the Survey or any updates to the Commitment or the Survey disclosing a Defect
of Title, but in no event later than Closing. Any item to which Purchaser
does not object shall be deemed accepted by Purchaser (the "Permitted
Exceptions") . After receipt of such notice, Seller shall immediately proceed
to remove or cure all Defects of Title specified in the notice from Purchaser.
If all such Defects of Title are not removed or cured prior to or within ten
days after the receipt of such notice, Purchaser may elect: (a) to accept
title to the Hospital Property subject to the uncured Defects of Title; or (b)
to terminate this Agreement.
ARTICLE 4: REPRESENTATIONS AND WARRANTIES
4.1 Seller's Representations and Warranties. Seller represents and
warrants to Purchaser as follows:
(a) Seller is a not-for-profit corporation duly organized,
validly existing and in good standing under the laws of the State of Florida
and has full power and authority to enter into this Agreement and to fulfill
its obligations hereunder.
(b) Seller is a not-for-profit corporation duly organized,
validly existing and in good standing under the laws of the State of Florida
and has full power and authority to enter into this Agreement and to fulfill
its obligations hereunder.
(c) Except for a potential right of first refusal that may be
claimed or asserted by Affiliated Princeton Physicians, LLC, Seller has the
full right, power and authority to sell and convey the property, and has taken
all action necessary to authorize the execution and delivery of this Agreement
by Seller and the performance of its obligations hereunder.
(d) Except for a potential right of first refusal that may be
claimed or asserted by Affiliated Princeton Physicians, LLC, Seller has the
full right, power and authority to sell and convey the property, and has taken
all action necessary to authorize the execution and delivery of this Agreement
by Seller and the performance of its obligations hereunder.
(e) This Agreement and all documents contemplated hereby have
been or will be duly authorized and executed (and acknowledged where
necessary) by the Parties named as signatories in those documents, and all
other necessary actions have been or will be taken, so that this Agreement and
all documents contemplated herein are valid and binding upon Seller.
(f) This Agreement and all documents contemplated hereby have
been or will be duly authorized and executed (and acknowledged where
necessary) by the Parties named as signatories in those documents, and all
other necessary actions have been or will be taken, so that this Agreement and
all documents contemplated herein are valid and binding upon Seller.
(g) The Hospital Property does not contain asbestos or material
containing asbestos.
(h) The Hospital Property does not contain asbestos or material
containing asbestos.
(i) The Hospital Property does not contain PCBs or PCB Items, as
those terms are defined in 40 C.F.R. Part 761.
(j) The Hospital Property does not contain PCBs or PCB Items, as
those terms are defined in 40 C.F.R. Part 761.
(k) The Hospital Property does not contain above ground or
underground storage tanks, as those terms are defined in 42 U.S.C. 691 et
seq. the Resource Conservation Recovery Act ("RCRA").
(l) The Hospital Property does not contain above ground or
underground storage tanks, as those terms are defined in 42 U.S.C. 691 et
seq. the Resource Conservation Recovery Act ("RCRA").
(m) There is and has been no release of petroleum into the
environment from an above ground or underground storage tank at the Hospital
Property, as those terms are defined in RCRA.
There is and has been no release of petroleum into the environment from
an above ground or underground storage tank at the Hospital Property, as those
terms are defined in RCRA.
There is and has been no release or threatened release, other than
federally permitted releases, of hazardous substances or pollutants or
contaminants into the environment from or through the Hospital Property as
those terms are defined in 42 U.S.C. ____ et seq. of the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA");
There is and has been no release or threatened release, other than
federally permitted releases, of hazardous substances or pollutants or
contaminants into the environment from or through the Hospital Property as
those terms are defined in 42 U.S.C. ____ et seq. of the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA");
The Hospital Property is in compliance with all applicable federal,
state and local environmental statutes, regulations, ordinances, and any
permits, approvals, or judicial or administrative orders issued thereunder.
The Hospital Property is in compliance with all applicable federal,
state and local environmental statutes, regulations, ordinances, and any
permits, approvals, or judicial or administrative orders issued thereunder.
The Hospital Property contains no conditions that could result in
recovery by any governmental or private party of remedial or removal costs,
natural resource damages, property damages, damages for personal injuries,
other costs, expenses or damages, or could result in injunctive relief,
arising from any alleged injury or threat of injury to health, safety, or the
environment relating to the Hospital Property.
The Hospital Property has full and free access to and from public
highways, streets and/or roads adjacent to the Hospital Property and Seller
has no actual knowledge of any fact or condition which would result in the
termination of such access.
Seller has not received any notices or demands from any mortgagee of the
Hospital Property or from any state, municipal or county government or any
agency thereof with regard to the Hospital Property, except notices relating
to Sellers present default on its bond debt.
Seller has not received any notice of, and has no other knowledge or
information of, any pending or contemplated change in any applicable law,
ordinance or restriction, or of any pending or threatened or judicial or
administrative action; or of any action pending or threatened by adjacent
landowners; or of any natural or artificial condition upon the Hospital
Property, or any party thereof, any of which would result in any material
change in the condition of the Hospital Property, or any part thereof, or in
any way limited or impede the operation of the Hospital Property, or any part
thereof, for any purpose.
4.2 Purchaser's Representations and Warranties. Purchaser represents
and warrants as follows:
(a) Purchaser has full power and authority to enter into this
Agreement and to fulfill its obligations hereunder.
(b) This Agreement and all documents contemplated hereby have
been duly authorized and executed (and acknowledged where necessary) by the
Parties named as signatories in those documents, and all other necessary
actions have been taken, so that this Agreement and all documents contemplated
herein are valid and binding upon Purchaser.
4.3 Pre-Closing Covenants of Seller. Following execution of this
Agreement and prior to Closing, Seller shall:
(a) pay all taxes and assessments affecting the Hospital
Property prior to the date such taxes and assessments are legally due and
owing.
(b) not encumber or permit to be encumbered the Hospital
Property in any manner that would materially impact the use of the Hospital
Property.
(c) not engage in or permit any action on the Hospital Property
that would materially impact the value or use of the Hospital Property.
(d) not sell or otherwise dispose of the Hospital Property
outside of the ordinary course of business without the consent of NewCare.
ARTICLE 5: RISK OF LOSS
If, between the date of this Agreement and the Closing Date, any
material part of the Hospital Property is materially damaged or destroyed by
fire or other casualty, or if any material part of the Hospital Property is
taken in condemnation or under the right of eminent domain, whether material
or not, or proceedings for such taking shall be pending or threatened,
Purchaser shall have the right to terminate this Agreement by notice given to
Seller within 10 days after receiving notice thereof. Seller shall promptly
notify Purchaser of each occurrence of the kind specified above and shall give
Purchaser such information relating thereto as Purchaser may thereafter
reasonably request. Alternatively, Purchaser may elect to purchase the
Hospital Property notwithstanding the damage or taking, without any abatement
or diminution of the Purchase Price, in which case Seller shall, on the
Closing Date, deliver to Purchaser any insurance proceeds or condemnation
awards received by Seller as a result of any occurrence specified herein and
assign to Purchaser all of Seller's right, title and interest in and to any
insurance proceeds or condemnation awards resulting from any such occurrence
that have not yet been received by Seller on that date. Seller shall
cooperate with and assist Purchaser in collecting any such proceeds or awards.
ARTICLE 6: INDEMNIFICATION
Seller shall, immediately and on demand, indemnify, defend and hold
harmless Purchaser and its (partners, officers, shareholders, directors),
together with all of their agents, affiliates, officers, directors, insurers
and employees (individually "Indemnified Party" and collectively "Indemnified
Parties") from and against any and all liabilities, judgments, injunctive
relief, costs and expenses, including without limitation legal fees and
disbursements, consultant fees, and costs and expenses incurred in
investigating, responding to discovery, or defending, involving claims,
demands, actions and causes of action, whether rightfully or wrongfully
brought or filed, to which any Indemnified Party may be subject arising out of
or relating in whole or in part to (i) ownership of the Hospital Property by
Seller, (ii) any actual or alleged contamination of the Hospital Property or
adjacent or neighboring land of, any hazardous or toxic substance, pollutant
or contaminant, petroleum, gasoline or diesel fuel, crude oil or any fraction
thereof, or any other substance regulated by or defined under any federal,
state, or local environmental statute (collectively referred to herein as
"Hazardous Substances"), (iii) any alleged injury or threat of injury to
health, safety or the environment relating to the Hospital Property or
adjacent or neighboring land, (iv) any actual or alleged noncompliance with
any federal, state or local environmental statutes, regulations, ordinances or
any permits, approvals or judicial or administrative orders issued thereunder,
giving rise to liability under any federal, state or local environmental
statutes or ordinances, or (v) any claim by any governmental or private party
for remedial or removal costs, natural resource damages, property damages,
damages for personal injuries, or corrective action costs under common law or
any federal, state, or local environmental statute. The foregoing indemnity
shall be binding upon Seller whether or not any contamination by or presence
or release of Hazardous Substances was caused by Seller, whether or not Seller
has knowledge of such contamination, presence or release, whether or not such
contamination, presence or release was foreseeable or unforeseeable or whether
or not such contamination, presence or release is disclosed in or acknowledged
by any report, document, study or information obtained by or submitted or
provided to Purchaser.
ARTICLE 7: DEFAULT AND REMEDIES
In the event that Purchaser or Seller fails to perform or comply with
any of its obligations or the terms contained in this Agreement, the injured
party shall have all rights and remedies available at law or in equity,
including damages, specific performance and termination of this Agreement,
which remedies shall be cumulative and not exclusive, except for circumstances
where an exclusive remedy is otherwise specified elsewhere in this Agreement.
ARTICLE 8: MISCELLANEOUS MATTERS
8.1 Recording. Neither party shall record this Agreement or any
memorandum of it without the consent of the party hereto, and any recording
without such consent shall be a material default hereunder.
8.2 Assignment. Purchaser may assign its rights hereunder without the
prior written consent of the Seller.
8.3 Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given (a)
on the date of delivery, if delivered personally on the party to whom notice
is given, or if made by telecopy directed to the party to whom notice is to be
given at the telecopy number listed below, or (b) on receipt, if mailed to the
party to whom notice is to be given by first class mail, registered or
certified, return receipt requested, postage prepaid and properly addressed as
follows:
To Seller:
Princeton Hospital, Inc.
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Chairman of the Board
To Purchaser:
NewCare Hospital Corporation
0000 Xxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: President
8.4 Attorneys' Fees. Should any litigation be commenced between the
Parties concerning the Hospital Property, this Agreement or the rights and
duties of either Seller or Purchaser in relation thereto, whether it be an
action for damages, or equitable or declaratory relief, or to collect any
indemnity provided for herein, the prevailing party in such litigation, in
addition to such other relief as may be granted by the court, shall also be
entitled to collect all of its costs in such action, including the costs of
investigation, settlement, expert witnesses and reasonable sums as and for
attorneys' fees together with all additional costs incurred in enforcing or
collecting any judgment rendered.
ARTICLE 9: INTERPRETATION OF AGREEMENT
9.1 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida.
9.2 Headings. The article and section headings in this Agreement are
for convenience only and shall not be used in its interpretation or considered
part of this Agreement.
9.3 Effect of Agreement. The entire agreement of the Parties is
herein written and the Parties are not bound by any agreements,
understandings, conditions or inducements otherwise than are expressly set
forth and stipulated hereunder. No provision of this Agreement shall be
altered, amended, revoked or waived except by an instrument in writing signed
by the party to be charged with such amendment, revocation or waiver. This
Agreement shall be binding upon and shall inure to the benefit of the Parties
and their respective successors and assigns.
9.4 Severability. If any clause or provision of this Agreement is
illegal, invalid or unenforceable under applicable present or future laws,
then it is the intention of the Parties that the remainder of this Agreement
shall not be affected but shall remain in full force and effect.
9.5 Survival and Benefit. The following provisions shall survive the
closing: Article 4, Article 6, Section 8.4, and Article 9. Seller
acknowledges that all of the conditions to this Agreement are for the sole
benefit of Purchase and that Purchaser may unilaterally waive the same.
9.6 Time. Time is of the essence of this Agreement. If any of the
conditions or obligations in this Agreement are not timely met by Purchaser or
Seller (including but not limited to tendering funds and signing of closing
documents on or before the Closing Date), then Purchaser or Seller, as the
case may be, shall be deemed to be in default hereunder, and the
non-defaulting party may, at its option, exercise its rights under Article 7.
9.7 Additional Instruments. Each Party hereto shall, from time to
time, execute and deliver such additional instruments and documents as the
other Party or its counsel may reasonably request to effectuate the intent of
this Agreement.
9.8 Compliance with Laws, Ordinances and Regulations. In performing
the obligations, covenants and conditions of this Agreement, Seller and
Purchaser shall comply with all applicable laws, ordinances and regulations.
IN WITNESS WHEREOF, the Parties have duly executed it as of this day and
year first above written.
SELLER:
PRINCETON HOSPITAL, INC.
By: /s/ Xxx X. Xxxxxxx
Xxx X. Xxxxxxx
Title: President
PURCHASER:
NEWCARE HOSPITAL CORPORATION
By: /s/ Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxxx
Title: President
THE OBLIGATIONS OF NEWCARE HOSPITAL CORPORATION HEREUNDER ARE
HEREBY UNCONDITIONALLY GUARANTEED BY NEWCARE HEALTH CORPORATION.
NEWCARE HEALTH CORPORATION
By: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
Title: Chairman
Date: September 30, 1997
